Expert Ways to Run a Financially Disciplined Martial Arts School

Do you ever find yourself wondering what competing schools in your area are doing to build a successful business? We’ve been on a mission for the past couple years to determine exactly what financially successful schools are doing right. This is what led us to create our first-ever Martial Arts Benchmark Report last year. To create the report, we surveyed hundreds of school owners around the world, asking them financial, demographic and emotional questions. Their answers helped us identify what differentiates leading schools from those who are struggling to make ends meet each month.

We recently released our second annual report, which contains several new discoveries, however one thing still holds true: the most important skill a school owner can master is establishing financial stability. Regardless of the energy of your instructors, the structure of your classes and the instruction you provide students when teaching your art, if the money isn’t there, the school won’t be either.

Here are the top three things these financially thriving schools are doing to build successful businesses.

1). Champions command higher prices

For the second straight year, we discovered that Champions charge significantly more than their less profitable counterparts. Top performing schools charge an average of $160 for an unlimited student agreement while Contenders only charge $99. This difference became even more significant when we examined discounts. Champions on average generate $146 per month from each student while Contenders generate $53.

Get your copy of our free Martial Arts Benchmark Report.

The lesson here: deliver significant value to your students through the services you provide. If you offer a stellar training experience, don’t devalue it by discounting your agreements just to get new students in the doors.

2). Champions better utilize their facility

One of the largest expenses in a school’s overall budget is its facility. This is why it’s important to ensure you have a facility that’s large enough to allow your students to have an amazing experience while training, yet not too big where you’re experiencing a decent amount of unused space. The key metric to evaluate how well you use your facility is the number of square feet per student. Even though they have much bigger spaces, Champions have around 15 sq. ft. per student, while Contenders have closer to 46 sq. ft.

Champions have slighter larger facilities, however, they are easily able to cover the additional costs associated with these facilities by bringing in more revenue each month as a direct result of charging more, discounting less and having a larger student base. Always be sure to look for opportunities to get more out of your current space (expanding class sizes, adding new classes, taking space away from the front desk area to be used for training, etc.) before deciding to take the leap into a bigger space.

3). Champions are disciplined with overall costs

While facilities costs are the highest expense for most schools, personnel costs are a close second. Personnel costs for Champions is around 18% compared to 23% for Contenders. When you add in facility costs, Champions only spend around 32% of their revenue on these two expenses, while Contenders spend well over 76% of their revenue here.

So why should you look at expenses as a percentage of revenue? It’s simple. How funds flow in and out of your business directly determines your long-term success and happiness. While money may not be your main motivational for owning a school, it’s necessary to stay on top of this if you want to continue serving your students for years to come.

Interesting in seeing what else Champions schools are doing to build successful businesses? Get your free copy of our Martial Arts Benchmark Report today!